Samsung receives $6.4 billion in CHIPS Act funding to build “semiconductor ecosystem” in Texas

The Biden administration just provided Samsung with a grant of up to $6.4 billion as part of CHIPS Act funding. The funding will supplement the company’s commitment to invest in building a “semiconductor ecosystem” in the state.

The funds will be used in Tyler, Texas, to focus on research and development of advanced logic technology, manufacturing and, perhaps most importantly, packaging. For chips, packaging refers to providing power, input, and output. It’s a highly specialized process that’s often done overseas, meaning even wafers manufactured stateside have to be shipped to another country and then mailed back. Samsung’s dedicated packaging facility should eliminate some of these headaches and strengthen the overall supply chain.

The funds will also be used to expand Samsung’s existing factory in Austin. Tyler and Austin are just 40 minutes apart, and the Biden administration said the merger of the two plants will transform “Samsung’s existing operations in Texas into a comprehensive ecosystem for developing and producing cutting-edge chips in the United States.” . The president also said it would create 21,500 jobs for Texans and set aside $40 million for training.

The CHIPS and Science Act gives the federal government the power to provide funding and loans to technology companies to encourage domestic spending. In addition to snapping up $1.6 billion in loans, GlobalFoundries is helping it embark on a major expansion. The company plans to use the funds to build a new manufacturing facility in Malta, New York, to produce chips for the automotive, aerospace, defense and artificial intelligence industries.

Intel recently spent $8.5 billion to continue developing various businesses in the United States. Intel plans to use the funds to build new factories to produce semiconductor chips for the artificial intelligence industry. The company is building two new manufacturing facilities in Arizona and two more in Ohio. Intel will also use the windfall to modernize two existing factories in New Mexico and Oregon. The company said it would invest $100 billion in U.S. chip manufacturing, bringing an influx of about 30,000 jobs.

President Biden signed the Chip and Science Act into law as early as 2022 to encourage domestic semiconductor research and manufacturing to reduce U.S. dependence on Chinese suppliers. All told, it sets aside $52 billion in tax credits and funding for companies to expand domestic production in the United States.